Everyone is talking about artificial intelligence (AI) right now- with many predicting that AI will lead the next wave of economic growth and productivity for the next couple of decades at least. However not all big-name AI stocks have the Street’s seal of approval. Nvidia (NVDA) and Advanced Micro Devices (AMD) both have a moderate buy analyst consensus rating while Tesla (TSLA) has a hold rating. And Nvidia and Tesla both have an average analyst price target below their current share price as analysts warn that prices have entered overblown territory.
To find less risky AI investing opportunities we looked for stocks with a strong buy consensus rating from the Street’s best performing analysts. This limits the consensus to ratings from analysts with the highest success rate and average return- and cuts out analysts that underperform the market. And if a stock has a strong buy rating, it is also more likely to have promising upside potential.
If you are looking for investing inspiration, try out TipRanks’ new stock screener. It offers a number of unique stock filters, including ‘best analyst consensus’ which can automatically pull up stocks with a strong buy analyst consensus rating from top analysts.
So now we know how to find strong buy rated stocks- let’s delve in and find the hottest AI stocks in the market right now:
1 Salesforce.com (NYSE:CRM)- (17 buy, 1 hold ratings, 11.35% upside)- cloud computing company Salesforce launched its AI-powered Einstein Analytics platform on June 15. According to CRM: “Einstein Analytics adds a layer of artificial intelligence to the entire analytics workflow…[to] improve customer service and optimize marketing campaigns.” Salesforce is clearly hoping this will secure it some of the growing AI pie as a new report by IDC (and commissioned by CRM) found that AI technologies will create more than 800,000 net-new jobs and add a whopping $1.1 trillion to global GDP by 2021.
2 Alphabet Inc (NASDAQ:GOOGL)- (28 buy, 3 hold, 15.96% upside)- Alphabet has made the most AI acquisitions (followed by MSFT), according to research firm Quid which calculated that GOOGL has made 20 AI acquisitions. Google CEO Sundar Pichai recently spoke about the “AI first” future at the company’s 2017 developer conference, where he revealed Google Lens (a camera that can recognize what it sees) and a new technology called AutoML which uses neural networks to build better neural networks- essentially creating an AI that can create itself.
3 Baidu (NASDAQ:BIDU)– (3 buy, 5% upside)- this Chinese internet company, the “Google of China” as it is often called, has been investing heavily in AI to give it an edge over Chinese competitors like Tencent and Alibaba. Indeed, Baidu has spent $2.9 billion on R&D in just 2.5 years, and the majority of this has been dedicated to AI, says CEO Robin Li. The money has funded a 1700-member research team and four separate research labs. Crucially, Baidu can use the data extracted from its search engine- which has 665 million monthly users- to make quick deep learning progress.
4 Delphi Automotive (NYSE:DLPH)- (6 buy, 10.52% upside)- Delphi is a global supplier of auto tech and has grown by an incredible 30% in the last year. The company, which has just spun off its powertrain business to focus on self-driving cars and electrical vehicles, has partnerships with multiple companies including Audi and the BMW-Intel-Mobileye cooperation which aims to bring a self-driving car to market by 2021.
5 Facebook Inc (NASDAQ:FB)- (26 buy, 2 hold, 1 sell, 14.33% upside)- Facebook hit the headlines after its robots began communicating together in shorthand English. The robots have since been shut down after the research program was completed. The purpose of the exercise: to see if robots can negotiate effectively by compromising, conceding and displaying false interest. Facebook has since published the research and open-sourced the code. The ultimate goal is to create a fully-competent personalized digital assistant.